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Dive Brief:

SCANA and Santee Cooper were warned in 2015 that their V.C. Summer nuclear project would not be finished in time to meet the 2020 deadline to qualify for $2 billion in federal tax credits, the Post and Courier reports.

The warnings were contained in a draft audit of the now abandoned nuclear project done by Bechtel that were deleted in the final version.

The discrepancy, which came to light last week, adds a possible coverup to questions about how much the utility managers of the project knew and when they knew it in the months and years before their decision to abandon the project in July.

Dive Insight:

Since their decision to abandon the V.C. Summer nuclear project in July, the project’s owners, SCANA’s South Carolina Electric & Gas (SCE&G) and state-owned Santee Cooper, have had a stream of problems.

It was beginning to become clear in September that the owners of the nuclear project knew of the project’s problems months before their decision to abandon it. But the most revelations are among the most damning.

A draft version of a $1 million audit on the status of the troubled project done by Bechtel and dated Nov. 9, 2015, said, “an assessment of the project schedule was also performed.” The final version of the Bechtel audit, dated Feb. 5, 2016, says “a specific assessment of the project schedule is not included in this report.”

“There was information that was withheld from us and the Public Service Commission,” Jeff Nelson, chief counsel for ORS, said.

“This is a cover up,” Rep. Russell Ott (D), who helped lead a special House committee that investigated the nuclear project, told The Post and Courier. “This is deception at its core. The bottom line is they lied to everyone and they did it intentionally.”

Both versions of the audit are available on the website of the South Carolina Office of Regulatory Staff. ORS received its copy of the draft report from The Post and Courier, ORS spokeswoman Nanette Edwards told Utility Dive.

The ORS is separate from the South Carolina’s Public Service Commission. It was created in 2004 as a non-adjudicative body to handle investigative, legal, prosecutorial, and educational roles and to represent the public interest.

The ORS has filed a petition with the PSC over rates related to the abandoned Summer project. Oral arguments in that petition are scheduled for Dec. 12. In October, AARP South Carolina filed a brief in support of the ORS petition. AARP says that 18% of monthly electric bill payments go directly to funding the abandoned nuclear project.

After receiving the final audit, SCE&G continued to tell state regulators that the nuclear project would be completed by December 2020, the deadline for the federal tax credits. And the PSC increased SCANA’s nuclear budget by more than $800 million. ORS is now asking the PSC to cut $37 million a month that SCE&G collects from its customers.

SCANA spokesman Eric Boomhower explained that "the schedule analysis did not appear in the Bechtel report issued in February of 2016 because Bechtel’s schedule analysis was too cursory and superficial to be of any use."

For example, "Bechtel did not even use the Consortium’s actual schedule in conducting its assessment. Instead, Bechtel prepared a high-level, sample schedule based on Bechtel’s experiences from previous construction projects," Boomhower told Utility Dive via email. "We anticipate these and other significant limitations in Bechtel’s methodology will be addressed in future regulatory proceedings before the Public Service Commission."

Meanwhile, SCANA on Nov. 16 entered into an agreement to buy a 540 MW gas-fired combined-cycle plant from Columbia Energy for $180 million.

SCE&G, which has been the primary customer for power from the plant, hopes to secure regulatory approval for the deal in 2018. SCANA says the gas plant would provide more than 40% of the power that would have been supplied from the now abandoned nuclear project.

The gas plant acquisition is part of a wider proposal that SCANA says would provide $4.8 billion in benefits to customers. The program also includes a rollback of residential electric rates to where they would have been in March 2015, resulting in an immediate annual reduction to rates by approximately $90 million or 3.5%. The proposal also includes the addition of about 100 MW of large scale solar energy to SCE&G’s system.